Black Tuesday Research Paper

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The Great Depression was the economic crisis and period of low business activity in the U.S. roughly beginning with the stock-market crash in October, 1929, and continuing through most of the 1930s. On October 29, 1929, the New York Stock Exchange fell 11 percent. Falling continued in the next three days reaching 30 percent of its value. That day is known as Black Tuesday and is considered as the beginning of the Great Depression and the precipitating of a great financial panic and loss of confidence in the economic system of the United States. Black Tuesday were lost 14 billion dollars, adjusted for inflation is considered the equivalent of less than 200 billion of today. Approximately equivalent to ten times the budget of the entire federal…show more content…
Indeed, in recent years it had become popular to invest in the stock market not only with money that had been saved, but also with borrowed money. When the stock market falls not only the savings are lost but many people were ruined but also with a debt by borrowing to invest orders, now had to pay. Another immediate effect is that people went en masse to the banks to get their money. Many in principle to compensate the losses in the stock market or to pay debts. Given the high demand for return deposits, banks can not cope and begins a series of bankruptcies that would reach the number nine thousand broken banking institutions in the following years. With the aggravating circumstance that at that time there was no FDIC and, therefore, the bank deposits were uninsured. In other words, if a bank failed, depositors were left with…show more content…
State intervention sought recovery of decayed industrial and agricultural prices and rising wages through market regulations based on two laws of 1933 (the Agricultural Adjustment Act and the National Industrial Recovery Act) that would be declared unconstitutional in 1935 . The Banking Act of 1933 and other reforms, introduced insurance for bank deposits which reduced public distrust to a financial system in severe crisis. He was to reduce unemployment through an expansive program of public spending (Federal Emergency Relief Act) that included major infrastructure works (roads and dams, mainly). The Social Security Act of 1935 established the unemployment insurance and other forms of social spending (pension insurance, accident and health, pensions, etc.). Now, were the war expenses, which finally succeeded in reducing persistent unemployment remained, except in 1937, up from 15% until
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